The benchmark Hang Seng index fell 326.12 points or 1.78 percent, to close at 17,983.10, after trading between a day high of 18,198.12 and a day low of 17,782.00 points.

Turnover totaled 52.8 billion HK dollars (6.79 billion U.S. dollars) compared with Wednesday's 52.8 billion HK dollars.

The properties sub-index, which covers 7 blue chips of the Hang Seng Index, lost 604.88 points or 2.63 percent to end at 22,363.20. The finance sub-index, which consists of 11 blue chips, lost 433. 32 points, or 1.76 percent, to end at 24,196.81 points. The commerce and industry sub-index shed 206.10 points, or 1.87 percent, to 10,841.95 points.

All the seven property heavyweights suffered losses on Thursday, after Hong Kong's local developer, Sun Hung Kai, won the tender for the development project above the West Rail Nam Cheong Station in Hong Kong with a much-lower-than-expected bid of 11.8 billion HK dollars amid cool market. There were also reports saying that some Hong Kong's banks had suspended mortgage loans for personal house buyers.

Shares of Cheung Kong Holding, a powerful HK-based developer controlled by billionaire Li Ka-shing, fell 1.99 percent to 88.65 HK dollars.

Sun Hung Kai Property shed 2.12 percent to 97.2 HK dollars. Shares of Henderson Land, another major developer in Hong Kong, lost 2.56 percent to end at 38.05 HK dollars. Hang Lung Properties edged down 1 percent to 25.5 HK dollars.

China Resources Land, a mainland-focused developer, tumbled 6.7 percent to 9.46 HK dollar per share. China Overseas Land, another mainland-focused developer, fell 3.24 percent to 11.96 HK dollars.

Financial blue chips also fell in the day.

Banking giant and market bellwether HSBC, which accounts for the largest weighting of the Hang Seng Index, lost 1.49 percent to end at 62.95 HK dollars. HSBC unit and one of Hong Kong's local bank Hang Seng Bank fell 1.88 percent to 93.95 HK dollars.

Shares of another Hong Kong's major bank, Bank of East Asia, fell 2.14 percent to 25.15 HK dollars. Local bourse operator Hong Kong Exchanges & Clearing lost 2.75 percent to 113.3 HK dollars.

Shares of the ICBC, the world's largest bank by market value, lost 1.21 percent to 4.07 HK dollars. China Construction Bank went down one percent to 5.07 HK dollars. Bank of China lost 1.5 percent to 2.63 HK dollars. BOC Hong Kong, an unit of Bank of China, lost 3 percent to end at 17.68 HK dollars.

Two major insurers suffered heavy losses in the day, after the China Insurance Regulatory Commission, the country's top insurance regulator, said Wednesday it would further increase the threshold for insurers to issue subordinated bonds, to reduce insurers' default risk.

Shares of China Life, one of the world's largest life insurers by market value, plunged 6.68 percent to close at 17.6 HK dollars. Ping An Insurance, China's second largest insurer, fell 3.21 percent to end at 49.8 HK dollars.

Shares of China Mobile, the world's largest mobile operator by subscribers which accounts for the second largest weighting of the Hang Seng Index, fell 1.25 percent to 75.25 HK dollars.

Mainland's oil companies were also major losers of the day. China's largest oil and gas producer PetroChina lost 2.58 percent to 9.45 HK dollars. China's top refiner Sinopec lost 1.38 percent, to close at 7.13 HK dollars. CNOOC, the HK-listed unit of China's National Offshore Oil Corporation, lost 3 percent to 12.78 HK dollars.

HK-based Esprit, a clothing retailer which heavily relies on wholesale operations in Europe, was the worst-performing blue chip in the day, with its shares plunging 7.75 percent to 10.48 HK dollars. (1 U.S. dollar equals to 7.78 HK dollars) Read More